State Department Issues Proposed Rule to Significantly Increase DDTC Registration Fees
The Directorate of Defense Trade Controls published in Monday's Federal Register the anticipated and controversial proposed rule to amend the International Traffic in Arms Regulations (ITAR) to significantly increase registration fees.
This proposal is intended to implement part of President Bush's January 2008 Export Control Directive that requires the State Department to initiate a self-financing mechanism so that up to 75% of the Directorate of Defense Trade Controls' (DDTC) will be self-financed.
The notice states that to "better align registration fees with the cost of licensing, compliance and other related activities", the following three-tier registration fee schedule is proposed:
Tier 1: A set fee of $2,250 per year is required for new registrants or registrants who have not submitted any applications during a 12-month period ending 90 days prior to expiration of the current registration.
Tier 2: A set fee of $2,750 per year is required for registrants who have submitted ten or fewer applications during a 12-month period ending 90 days prior to expiration of the current registration.
Tier 3: The third tier is for registrants who have submitted more than ten applications during a 12-month period ending 90 days prior to expiration of the current registration. For this tier, registrants will pay a fee of $2,750 plus an additional fee based on the number of applications submitted. The additional fee will be determined by multiplying $250 times the number of applications over ten submitted during a 12-month period ending 90 days prior to expiration of the current registration.
The current DDTC registration fee is $1750 per year for all registrants, regardless of the number of licenses submitted. While all companies will face increased fees under this proposal, companies submitting numerous license applications per year and falling in Tier 3 will have to pay significant registration fees to DDTC. For example, a company submitting 50 applications (although the term "application" is not defined) per year will have to pay an annual registration fee of $12,750 ($2750 + (40 x $250)).
The proposed rule provides that universities and non-profit organizations will be included in Tier 1.
The Department of State will accept comments on this proposed rule until August 27, 2008. Details on where to submit comments can be found in the Federal Register notice.